THE Borneo Post with the expert help of Rockwills Trustee Bhd, the leading specialist in estate planning having pioneered wills and trust 27 years ago, is publishing a regular Q&A column on estate planning. It will feature questions which readers have in mind but don’t know who to ask.
Question 1: My father passed away and in his wiill, my uncle was appointed as the executor. We were being informed that he would take care of the rest, but it has been many years and we still haven’t gotten our father’s assets. My brother and I have politely asked our uncle on the progress but our uncle did not tell us much. As he is our uncle, we also don’t feel like pushing things too far. Is there anything we can do?
Answer: We understand that you do not want to upset your uncle, but it is always good to have a sit-down talk with your uncle so that he can understand your concerns as a beneficiary.
At the same time, he would have an opportunity to explain any difficulties he may be facing that caused any delay. As a beneficiary, you have the right to ask the executor for a complete inventory or statement of account.
If your uncle is not willing to discuss, then you could consider seeking a lawyer’s help to file an administration action against your uncle at the High Court as guidance on issues that arose during the administration process, if your uncle failed to disclose accounts or information.
This is not meant to remove or deprive an executor of the probate granted. The executor will only need to furnish and verify accounts or receive instructions to perform or refrain from performing a particular act.
Unless your uncle has committed severe misconduct throughout the estate administration process, you can seek to have the executor removed and replaced with a more suitable person.
Nevertheless, this might then cause unnecessary delays in distributing the estate. Simply put, you can only bring this matter to the court if you are not satisfied with the way your uncle execute.
We hope that by sharing this lesson, the public will become more aware that a Will is about more than just leaving assets to future generations. By appointing a trusted, responsible, and adequately skilled individual executor can ensure a smooth administration, but we can never be certain that everything will still go according to plan after we pass on.
Thus, you should consider the following questions before appointing an executor for your will: First, do you really want to put someone you loved through this burden? Second, is he or she willing and capable to execute accordingly?
In summary, we always advise people to appoint a licensed trustee company as their executor, someone who is experienced in managing estate distribution and who can distribute the assets according to your instructions spelt out in the will, to ensure your family members can inherit your estate peacefully without any hassles and to avoid allegations of fraud and manipulation.
Question 2: I heard that when a person passes away, the family does not need to settle the deceased’s debts. Is it true?
Answer: According to the law, family members are not required to pay the debts of a deceased by using their own money, and the creditors do not have a right to make claims against deceased’s family members. The income tax is an exception, though. The executor is responsible to get the tax clearance from Inland Revenue Board (IRB) and pay off liabilities before distribution to beneficiaries. Although this is an uncomfortable matter, it is important to demystify the situation and learn how to handle outstanding taxes after the loss of a loved one.
In a situation if there is a will, the executor is responsible to clear off any of the unpaid taxes owed by the deceased by using the deceased’s estate. However, if the deceased passed on without a will, the next-of-kin, either the spouse or children would be liable for paying IRB any outstanding taxes on behalf of the deceased.
Furthermore, even though family members are not required to pay the deceased’s debts, it does not mean that the debts will go away when they die.
Perhaps the age-old saying “nothing is certain but death and taxes” is true after all. These debts must be cleared using the deceased’s estate.
In order to protect the assets that you leave behind and prevent delays in the distribution of the inheritance, you could now state clearly in the will about using specific assets to clear off the estate’s outstanding debts and liabilities.
By doing so, this would prevent your beloved family members from bearing the severe financial consequences, while not adding to both their financial and emotional burden after your passing
To put it simply, the debts do not die together with us. The best way to resolve this issue is by making a comprehensive estate planning including a Will and a trust with a professional licensed trustee company, as they can guide you what is necessary to help you achieving your estate planning objectives.
With this, you can now have peace of mind when it is time to bid goodbye to your loved ones, as you can now be certain that all your lifetime commitments would be fully settled, and your loved ones would not be burdened with your debts.
This Q&A Column in published as a joint public service and educational initiative with Rockwills Trustee Bhd. Please email your questions related to estate planning to email@example.com or Rockwills’ training and business development assistant general manager Sam Chan (firstname.lastname@example.org).